Your 5-Step Plan to Offset Carrier Rate Increases
As the end of the year approaches, you can make some predictions with confidence. The days get shorter. Holiday spirit abounds.
For 2019, shippers are expected to increase their rates between 3.9 and 5.9 percent. This will vary by carrier, as well as by the size, weight and frequency of your shipments. But multiplied against thousands of packages, even minor increases can have a major impact.
Still, it’s possible to offset these increases and keep your profits growing. All it takes is some strategic planning, and a little help from your shipping partner.
Tip 1. Shop Around
Rate increases aren’t equal across the board. If your carrier is increasing shipping rates beyond what you’re comfortable with, now could be the perfect time to shop around.
Comparing overall rates by weight and shipping zone will give you a good idea of how much you’ll pay with each carrier. But remember, that isn’t the whole story. Carriers have different dimensional (DIM) weight divisors, which can increase charges on large or heavy packages. Other ancillary fees such as delivery area surcharges or fuel surcharges can also increase your total cost of international shipping and domestic shipping.
Paying close attention as you comparison-shop will help you fully understand how a carrier will affect your bottom line — so you can choose the most economical option.
Tip 2. Use Your Data
Even after you select a shipping partner, you can still find more cost-saving opportunities. The best place to do it? Your transit reports. These reports reveal how effectively your shipping process is performing — and where inefficiencies or inaccuracies are costing you money.
Frequently checking transit reports will help you identify and resolve issues faster, so you can enjoy the financial benefits of a smoother process. For example, if you notice a long package tail in one postal zone, you can find the root problem and avoid costly reships or customer claims.
Tip 3. Optimize Your Operations
Reducing costs on the back end is another way to improve efficiency. Your fulfillment operations are a great place to start. An experienced fulfillment partner can review your processes and recommend improvements, so you can prepare packages for shipment faster and with lower overhead.
And don’t forget about customer experience! Disappointed customers are less likely to return for repeat purchases, which can damage your bottom line. They can also drain your resources by increasing your volume of customer service calls. By resolving customers’ delivery issues and improving your reputation, you can run a leaner, more effective business.
Tip 4. Pay Attention to Packaging
Carrier rates may be rising, but the price you pay per shipment doesn’t have to. That is, if you can find a more efficient way to package your items. Because DIM weight accounts for both size and weight, making packages lighter or smaller will shrink your costs accordingly.
Right-sizing your packaging — closely matching box size to product size — is an easy way to save money on both DIM weight charges and packing materials. Some durable products can even be shipped in lightweight Jiffy mailers instead of boxes: a huge cost-savings opportunity.
Tip 5. Find the Right Shipping Partner
Lowering your total cost of shipping is a big undertaking, but you shouldn’t have to do it alone. The right shipping partner can help you keep your rate-increase stress under control, so you can operate as efficiently and cost-effectively as possible.
At OSM Worldwide, we take a data-driven, customer-first approach to business shipping. Our consultative services and partnership with the USPS help 98 percent of our shipments arrive within one to five business days, while lowering your total cost of shipping.